Exam 37: Corporate Governance and the Sarbanes-Oxley Act

A buy-and-sell agreement allows shareholders to sell their shares to people other than fellow shareholders or the corporation.

Which of the following are considered owners of a corporation?

________ is a system in which each shareholder votes the number of shares he or she owns on candidates for each of the positions open.

A system in which each shareholder votes the number of shares he or she owns on candidates for each of the positions open is known as cumulative voting.

According to the right of first refusal,a selling shareholder must offer to sell his or her shares to the other parties to the agreement before selling them to anyone else.

One of the powers of a shareholder is his or her right to elect the board of directors.

A system in which a shareholder can accumulate all of his or her votes and vote them all for one candidate or split them among several candidates is known as ________.

The Sarbanes-Oxley Act applies only to public companies.

Kinderfelt Corporation has 15,000 outstanding shares of which Gordon owns 2,000.Kinderfelt plans to raise more capital by issuing another 10,000 shares of stock.With preemptive rights,how many of the new shares does Gordon have the right to buy before they are sold to the public?

The duty of loyalty requires directors and officers to subordinate their personal interests to those of the corporation and its shareholders.

The board of director's right to inspection can be limited by bylaws.

Proxy solicitation for shareholder votes cannot be made by electronic transmission.

Merrick and Stanley Corporation has 28,000 outstanding shares.During a proposal for a merger,the shareholders decide to increase the quorum of the vote of shareholders to 75 percent using the supramajority voting rule.How many minimum affirmative votes are needed to pass the supramajority voting requirement?

The ________ Act is a federal statute enacted by Congress to improve corporate governance.

Which of the following is considered an absolute power of corporate directors?

A ________ is an agreement that requires a selling shareholder to offer his or her shares for sale to the other parties to the agreement before selling them to anyone else.

Helen works as the vice president of Gotspeed Corporation,a company that manufactures and markets sports shoes.Nestor,a private cobbler,designs a new model of shoes that help a user's feet grip the shoe better,and he calls it the Anklator.Nestor's friend fixes an appointment for him with Helen to present his shoe model for possible adoption by Gotspeed.Instead of bringing the opportunity to Gotspeed's board of directors and the corporation,Helen pays Nestor's asking price and purchases the Anklator model herself.Helen leaves Gotspeed Corporation and forms her own company that manufactures and markets the Anklator shoe models.Which of the following is the the duty of loyalty breached by Helen?

A shareholder's authorization of another person to vote the shareholder's shares at the shareholders' meetings in the event of the shareholder's absence is called ________.

According to the Revised Model Business Corporations Act (RMBCA),what establishes a quorum to hold a meeting of the shareholders?

A duty that directors and officers have not to act adversely to the interests of the corporation and to subordinate their personal interests to those of the corporation and its shareholders is known as ________.